Thursday, March 23, 2017

Healthcare Cost History

Healthcare for serious illness is unsustainably overpriced and underperforming.  We’ve spent $trillions on healthcare since 1965 and have little to show for it.  The idiocy of ObamaCare destroyed healthcare in the US and now it’s time to look at what got us here. There is ample evidence that federal subsidies for healthcare have cause the destruction of healthcare in the US.


Prior to 1965, hospital room and board charges were $24 per day and test and treatment costs were modest. Major Medical insurance was $100 per year. The cost of delivering a baby was $600.


Healthcare cost inflation began in the 1960s in a perfect storm that included the Vatican Council in 1962 that regrettably inspired “Liberation Theology”, “Social Justice” and a myriad of liberal causes in the Catholic Church.  Many hospitals were owned and run by Catholic Nuns, but that was soon to change.   In 1965, Medicare and Medicaid were passed to give government healthcare subsidies to retirees and the poor. This inspired a rapid increase in hospital costs.


In the 1970s, more federal dollars poured into healthcare with strained promises of new cures for cancer and heart disease.  Medical specialties had been established and very expensive specialized hospital test equipment was added. The Nuns were selling their hospitals to “Accountants” and room and board charges moved to $100 per day, test and treatment costs had also quadrupled.


In the 1980s, the notion that “everyone”, including illegal aliens should be treated at hospitals regardless of their ability to pay for this treatment was implemented. States closed their public health facilities and mental hospitals. Counties began to close their county hospitals that had been used to treat the “poor”. Cost shifting to paying hospital customers began to rise with the influx of illegal aliens.


In the 1990s, health insurance costs were still low at about $150 per month for family coverage. Employers were moving from paying 90% of this premium to 70% of the employee premium to shift the cost to employees. Deductibles were still $100 per person.


By 2000, household income flattened as wage increases declined.  Excessive immigration and open borders caused US citizen work participation to decline and interest rates were reduced, while home prices soared. The 2008 Mortgage Security Meltdown scam exploded and the US economy went in the tank, but healthcare costs continued to rise.


In 2009, ObamaCare passed and everything was about to change. Health Insurance became mandatory and costs increased by $2500 per year for families and deductibles began to rise. Cost shifting was now imposed on consumers to pay all the costs of care for the sick and the poor.  Premiums rose for families to $6000 a year with $4000 deductibles.


Now in 2017 we are looking at the result of decades of reckless and costly government actions that prompted scams by those who could benefit from these actions.


It is no surprise that “healthcare” is not one of the “enumerated powers” given to the federal government. By ignoring the US Constitution, this unconstitutional involvement in healthcare by the federal government has resulted in pricing the healthcare industry out of business.


The solution is to let the air out of this bubble gradually. Congress could announce a 10 year plan to defund federal healthcare subsidies by 10% per year beginning in 2018. Costs will not decline until this is done.


This is not a life or death problem.  There is no reason for everyone to have health insurance.  50% of the US population is healthy and spends an average of $274 per year on healthcare.  The availability of healthcare savings accounts will give self-reliant, responsible folks who can afford it to contribute to these accounts to pay for their own healthcare needs.


Involving the States is currently in place with Medicaid and federal subsidies should be reduced by 10% per year along with Medicare.  Patients need to be given the charges for hospital services, so they can compare these with home-care options. Patients need the right to shop around for the best value to avoid overcharging scams.


Those who prey on patients, doctors and hospitals should be restrained.  Malpractice lawsuits should be discouraged or eliminated; this should remove “defensive medicine” costs to be reduced.  Insurance companies should be ready to price catastrophic major medical coverage for medically necessary items that rescue and restore patients.


Employers should look at self-insuring by adopting medical trusts and purchasing reinsurance and hiring a third-party administrator to process claims for their employees. This delivers a 30% savings to employers who are large enough to have their own medical insurance plans. Employers should also look at giving employees a 25% match to their healthcare savings accounts.


Counties should revisit their needs and partner with low cost clinics to serve the poor by providing facilities that can be used by low cost or free clinics.  There will be millions of poor folks who will not buy any health insurance at all.  Providers and hospitals should be free to turn them away unless they can pay their bills eventually.  Providers may, as they have done in the past, volunteer to work in free clinics.


Patients need to take control of their own preventive healthcare strategies and be wary of the current medical business model that overcharges for expensive treatments that don’t work. Patients should make sure that they are getting 100% of their daily requirements of vitamins and minerals, especially magnesium. Patients should avoid going on “fishing trips” to see if they “have anything”. These tests are expensive and unnecessary unless your symptoms are debilitating. Patients need to know that pain can be caused by inflammation. If the inflammation is caused by bacteria rather than pulling a muscle or tendon, anti-biotics can relieve bacterial inflammation. Patients need to know that diabetes II is curable if you lose weight.


Healthcare hasn’t really changed; it has always been a “trial and error” business.  Physicians need to do a better job diagnosing illnesses with less expensive testing, a lost art, to avoid sending patients through $20,000 worth of testing and still not finding out what is wrong with them. Another “buck-burner” is post-op infections; these are all too common.


Taxpayers should be able to deduct all IRS 502 medical expenses on Schedule A of form 1040 without subtracting 10% of their income. Patients should use this deduction to give them an incentive to do smart things that are not “medically necessary” and therefore not covered by insurance.


In the end, what we need is for healthcare costs to go down at least to their pre-Obamacare levels for the 50% healthy patients.  


Norb Leahy, Dunwoody GA Tea Party Leader

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